TomCo Energy PLC (LON:TOM) said it has raised £1.5mln in a share placing to fund the advancement of its Greenfield Energy joint venture (JV) with Valkor.
The AIM-listed oil shale exploration firm said it had raised the funds through the placing of 375mln new shares at a price of 0.4p each, a 31% discount to its closing price on Wednesday.
TomCo said the cash will be used to provide up to US$1.5mln (£1.2mln) in funding to the Greenfield JV, which is looking to advance operations at the Petroteq Energy existing oil sands plant (POSP) at Asphalt Ridge, Utah.
The company said the funds will allow Greenfield to undertake planned upgrades to the oil sands plant and complete associated tests with the aim of demonstrating the commerciality of the plant.
The upgrades are expected to increase the plant’s capacity to 500 barrels of oil per day, with TomCo expected the upgrade works to take around three months to complete followed by a four to six week testing programme.
"We are pleased that we have been able to secure the necessary funding via the Placing to enable us to advance Greenfield, to undertake the upgrades to the POSP and complete the associated test programme. We look forward to keeping shareholders updated as we seek to demonstrate the commerciality of the Oil Sands Technology", said TomCo chief executive John Potter.
Shares in TomCo were 13.9% lower at 0.5p in lunchtime trading on Thursday.